Tuesday, June 21, 2016

There is no clear correlation between the minimum wage and employment levels.

There's a great deal of debate on the minimum wage.  On the one hand, there is the argument that raising the minimum wage will reduce employment.  On the other hand, there is the argument that people should get a living wage.  Well, below is a table that shows what happened to employment in the 12 months after an increase of the federal minimum wage.  Be aware that this table was used to refute the statement that increasing the minimum wage always resulted in job growth.  In this case, that statement was judged to be mostly false.

Source:  Does raising the minimum wage always result in job growth, by Lauren Carroll, Politifact.com, November 6, 2014.

It's clear from the table that sometimes job growth occurred after raising the minimum wage, and sometimes it didn't.  Upshot:  There is no clear correlation between the minimum wage level and job growth.  Why?  Probably because wage levels are just one of many factors that influence the economy.


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